With a view to increasing collection of value added tax (VAT) from shop owners under 'participatory system', a new arrangement prescribed by the business community, the registration of shops will be completed by this month.

This was informed at a review meeting yesterday attended by Finance Minister M Saifur Rahman, Finance Secretary Zakir Ahmed Khan, National Board of Revenue (NBR) Chairman Khairuzzaman Chowdhury and business leaders.

Talking to journalists after the meeting, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Abdul Awal Mintoo

said the new system would help increase VAT collection from shops.

The business community is supervising the registration of shops with the help of officials from the tax administration. "We have already completed registration of 95 per cent of the shops throughout the country," Mintoo said.

Under the participatory system, which has partly been introduced at different levels, all shops will come under registration process.

The shops under city corporations will have to pay a minimum VAT of Tk 4,200 annually.

The shops at district level will pay Tk 3,000 while at upazila level it will be Tk 2,000 for each shop.

Under the system, the representatives of shop owners in consulta-

tion with the NBR officials will fix the amount of VAT on case to case basis with a view to check harassment on shop owners by tax officials.

Once the amount is fixed, the individual shop owners will pay the agreed tax to NBR and obtain a certificate which will be put on display at the shops. This will prevent them from further VAT claims by NBR inspectors.

As FBCCI had long been pursuing the system to ensure hassle-free VAT collection, the government had introduced it at different city levels a couple of years ago.

At the meeting Finance Minister M Saifur Rahman said the government is contemplating to introduce coupon system against VAT pay-

ment and hold lottery to award attractive prizes for encouraging VAT payment. Such a system exists in Taiwan and South Korea.

"This is now in the planning stage. The government will inform everything about the system after formulating a structure for it," Saifur told journalists after the meet.

The FBCCI president said annual sales at shops are amounting to around Tk 35,000 crore and the government should get at least Tk 600 crore in VAT under the system.

"But the realisation from this head was only Tk 42 crore in the last fiscal year," he said adding that the system should generate around Tk 300 crore this year.